Who are You Writing a Business Plan for?
Before small business entrepreneurs begin to write a business plan
, they first need to think about the audience who will read it. Knowing who will be reading it can help determine what needs to be included in the plan. There are four main types of audiences: owners, investors, suppliers, and managers. Each of these four groups will be interested in different parts of a business plan.In addition to proving profitability, owners will want to write a business plan about the day-to-day operations especially if they will be running the business themselves. They will need to describe the products or services provided and how they are produced. They will need to know what will be expected from employees. And, they will need to document their plan for the sales and marketing process. These are all important aspects of the daily management of a new business start up.
Investors, or lenders, will be most interested in the financial statements. They will want to know how much money the owner(s) will invest in the business and how much is expected from investors, how much total money will be needed to get the business started, and when the business will be able to pay back the loan. Some of the most typical financial statements included in a business plan are the income statement, cash-flow forecast, balance sheet, and break-even and ratio analysis. Investors will review the financial statements to analyze the risk of lending money to the small business start up.
Sometimes suppliers will need to review a business plan, too. If a new business is asking for a credit line from a supplier, the supplier will read the plan as part of the credit application process. When a small business entrepreneur is writing a business plan with a supplier in mind, they'll need to focus on the supplies or equipment needed in the new business, including what exactly they'll need, how many suppliers they will have, and how they'll pay off the supplies or equipment. A new restaurant, for example, may have two major suppliers: one for food and one for equipment.
The least common audience is managers. Some business may have multiple locations. In this case, the small business entrepreneur will want to make sure those location managers understand and share their same vision for the company. They will also want all managers to conduct the business in a consistent manner at all locations and will want the managers to know the financial expectations they will need to meet. Just like the owner, managers should have a road map or guide for running the day-to-day operations of a small business start up.
It's important for a small business entrepreneur to understand their audience before they begin to write a business plan since each audience will want answers to different questions. Considering the owners, investors, suppliers, and managers will make writing a business plan much easier and more successful.
Who are You Writing a Business Plan for?
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